Moore Money Retirement CheckFrom Ryan Moore, host of Moore Money on KRLD 1080
Free calculator · Texas · 2026 rules

Retiring in Texas: what will you actually pay in taxes?

Short answer: Texas has no state income tax, so your Social Security, pension and IRA withdrawals aren't taxed by the state. Property tax is the big bill instead. At 65 the school-tax homestead exemption rises from $140,000 to $200,000 and your school taxes are capped at that year's level, which can cut the bill a lot.

By Ryan Moore, host of Moore Money on News Radio 1080 KRLD · Reviewed October 2026 · Runs in your browser; nothing you type is sent anywhere.

Age 65 or older gets the larger school exemption.
Per $100 of value, from your tax statement. Many DFW districts are 0.9% to 1.2%.
Everything on your bill except the school district.
Social Security, pensions and IRA withdrawals.
Groceries and medicine are mostly exempt.

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The three taxes that matter when you retire in Texas

  • Income tax: none. Texas doesn't tax wages, Social Security, pensions, IRA or 401(k) withdrawals, or Roth conversions. Federal tax still applies.
  • Property tax: the big one. Texas funds schools and local government mostly through property tax, so rates are among the highest in the country. Exemptions for homeowners, and bigger ones at 65, are where the savings are.
  • Sales tax: the state rate is 6.25%, and cities and counties can add up to 2%, so most of DFW pays 8.25%. Most groceries and prescription medicine are exempt.

What changed in 2025

Texas voters approved two constitutional amendments in November 2025, retroactive to the 2025 tax year. The school-district homestead exemption for every homeowner rose from $100,000 to $140,000. The extra exemption for homeowners 65 and older (or disabled) rose from $10,000 to $60,000, for a combined $200,000 off your home's value for school taxes.

The 65+ school tax ceiling

When you qualify for the 65+ exemption, your school taxes on that home are capped at the amount for the year you qualified. They can go down, but not up, unless you add significant improvements like a new room. If you move within Texas, the ceiling can transfer as a percentage. See the Texas property tax over 65 calculator.

Where Texans still get taxed in retirement

Federal income tax still applies to IRA and 401(k) withdrawals, pensions and up to 85% of Social Security, and Medicare premiums rise with higher income (IRMAA). For many Texas retirees, the order you draw from accounts matters more than anything the state does.

See your whole Texas picture

Property tax is one line. The free Retirement Check adds federal taxes, Social Security timing and how long your savings may last.

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Common questions

Does Texas tax Social Security or pensions?

No. Texas has no state income tax, so Social Security, pensions, IRA and 401(k) withdrawals aren't taxed by the state. Federal income tax still applies.

How much is the Texas homestead exemption for seniors?

For school taxes, homeowners 65 and older get $200,000 off their home's value: the $140,000 general exemption plus a $60,000 age 65 exemption, approved by voters in November 2025 and retroactive to 2025.

Do property taxes freeze at 65 in Texas?

School taxes on your home are capped at the level of the year you qualify for the 65+ exemption. Counties, cities and junior colleges may offer their own ceilings, but it's optional for them.

Is Texas a good state to retire in for taxes?

For income taxes, yes: there's no state income tax on any retirement income. Property tax is the trade-off, so the exemptions and the 65+ ceiling matter a lot.

Sources

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